Preview

Airline Industry Analysis

Satisfactory Essays
Open Document
Open Document
581 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Airline Industry Analysis
RUNNING HEADER: MGT4101_S01
MGT4101

TITLE: WEEK 6 ASSIGNMENT 4:

Final Project — Importance of Capital Investment for Airlines

STUDENT:

DATE: February 11, 2013

Importance of Capital Investment for Airlines

Capital investment projects for an airline are the most important financial decisions and expenses made by airlines because capital investment projects involve a significant amount of money, the investment project duration is more than a year, and most often involves several years. If the airline makes a poor capital investment decision it can have a disastrous effect on the Airline and can even cause the Airline to bankrupt, as the Airline will lose a great sum of money. The 2004 financial Operational Highlights for the U. S Airline Industry indicate that the Return on Investment was as follows:

|1993 |1994 |1995 |1996 |1997 |1998 |1999 |2000 |2001 |2002 |2003 | |Return on Investment % |-0.4 |5.2 |11.9 |11.5 |14.7 |12 |11.1 |6.4 |-6.5 |-9.6 |-0.3 | |
In reviewing the company's Return on Investment, we can see an increased in the Airline Return on Investment in 1993 the return on investment was a negative 0.4 in 1994 the return on investment became positive at 5.2 ;and in 1995 the return on investment was 11.9, for 1996 the return on investment was 11.5, for 1997 the return on investment was excellent at a high of 14.7, in 1998 we see a trend on return on investment declining from 14.7 to 12% for 1998 and 11.1 for 1999, the industry's return on investment further drops in 2000 to 6.4 and continues to decline in 2001 the rate of return was a negative 6.5 (-6.5) in 2002 the rate on return further drops to a negative 9.6 (-9.6) and in 2003 the industry start to recover with a change in rate of return from a negative 9.6 in 2002 to a negative .3 (-0.3). The most profitable year for the company return on investment was the year 1997 with a 13.6% increase over the year 1993. However, between the years

You May Also Find These Documents Helpful

  • Powerful Essays

    The question can be is. How has the economy of the airline industry performed throughout the many decades it has been? In addition, what did the industry do as it has gone through many events that have challenged its survival? In this type of industry, we can say that it has seen their share of success in profits but has seen its share of overwhelming down trends. You can definitely consider there is this industry depends on the economy around it and solely affected by it too. The airline industry has seen highs when the demand for their services was increased and the decreases when events had a major impact on their survival of the industry. While there are obvious externalities that affect the outcome of this industry, there is more to it. Monetary and fiscal policies affect the industry. Along with everything that has affects this industry, there is a noticeable wage inequality that has intensified.…

    • 2884 Words
    • 12 Pages
    Powerful Essays
  • Good Essays

    Airline Markets

    • 1014 Words
    • 5 Pages

    Air transport markets are very changeable by nature. The aviation industry in general is usually the first industry to be affected by periods of economic instability and recession and the last to rebound back. Two markets that this report will focus on are that of Fractional Ownership Markets and Cargo Markets.…

    • 1014 Words
    • 5 Pages
    Good Essays
  • Good Essays

    Airline Industry

    • 668 Words
    • 3 Pages

    This paper briefly described what the airline industry included and the environment of the competitive market. Air transport has been a big industry. And the airline industry is consistent developing. After the crisis, although the airline industry has been hit , the industry is also one of the vital industries.…

    • 668 Words
    • 3 Pages
    Good Essays
  • Good Essays

    SW Airline

    • 550 Words
    • 1 Page

    for Southwest Airlines to recover investment expenditure in a short time. So the project is an…

    • 550 Words
    • 1 Page
    Good Essays
  • Powerful Essays

    As of December 31, 2011, Delta Airlines, Inc. has short-term investments totaling $958 million and long-term investments of $188 million. Short-term investments may be classified as any investments held for at least three months and no longer than one year. Long-term investments are classified as any investments held for a period longer than one year. With the recent large cash infusion that Delta Airlines, Inc. received in the amount of $700 million, the company should be able to invest the additional funds in stock and debt securities to maximize…

    • 1780 Words
    • 8 Pages
    Powerful Essays
  • Good Essays

    The U.S. Airline Industry

    • 1205 Words
    • 4 Pages

    The U.S. airline industry provides a unique service to its customers. It transports people and goods with efficiency and convenience which is not achieved by any other service. The purpose of this article is to collect data on the U.S. airline industry and analyze the state of the industry today. Data came from sources such as the Federal Aviation Administration, scholarly articles, and websites such as dallas.culturemap.com and airwise.com. Tools used to analyze the data include P.E.S.T., and Porter’s five forces. The analysis also focuses on the industries’ drivers of change and its key survival factors.…

    • 1205 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    Problem set

    • 1065 Words
    • 5 Pages

    2. Tibbs Inc. had the following data for the year ending 12/31/07: Net income = $300; Net operating profit after taxes (NOPAT) = $400; Total assets = $2,500; Short-term investments = $200; Stockholders' equity = $1,800; Total debt = $700; and Total operating capital = $2,300. What was its return on invested capital (ROIC)?…

    • 1065 Words
    • 5 Pages
    Satisfactory Essays
  • Powerful Essays

    Return on Investment

    • 1457 Words
    • 5 Pages

    Return on Investment (ROI): An examination of ROI financial analysis and its historical roots with the DuPont Company…

    • 1457 Words
    • 5 Pages
    Powerful Essays
  • Powerful Essays

    Ratcliffes Executive Summary

    • 5082 Words
    • 21 Pages

    It can be seen that as the operating profit increases, so does the return on investment. It can also be seen that the business has been controlling the Fixed costs of the business well. It is however, not a very high figure. As a benchmark, and it is quite a crude benchmark, investing money in a bank account would normally give you a return of around 10% so a worthwhile return would normally be above this level…

    • 5082 Words
    • 21 Pages
    Powerful Essays
  • Good Essays

    balance score card

    • 552 Words
    • 2 Pages

    Financial Quarterly Profit ResultsReturn on Capital Employed $5,000$4,000 $6,000$1,500 The quarterly profit results exceed the projection by $1,000 ($6,000 versus $5,000) in contrast the return on capital was lower by $2,500 ($4,000 versus $1,500).…

    • 552 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    Airline Industry Analysis

    • 913 Words
    • 4 Pages

    This is not an exhaustive analysis. We created it for guidance during our marking, but everyone’s paper was different.…

    • 913 Words
    • 4 Pages
    Powerful Essays
  • Good Essays

    magents

    • 997 Words
    • 6 Pages

    1996 return on invested capital = 1824 / (12193 + 3056 + 1213) = 0.110800632…

    • 997 Words
    • 6 Pages
    Good Essays
  • Good Essays

    not applicable

    • 1009 Words
    • 4 Pages

    Return on Investment (ROI) measures the rate of return generated by an investment center’s assets. The use of ROI has some…

    • 1009 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    darden capital management

    • 1939 Words
    • 39 Pages

    the 12 months ending March 31, 2004. Such return performance was impressive both in absolute…

    • 1939 Words
    • 39 Pages
    Powerful Essays

Related Topics